Supply Chain Management - Rolls-Royce

1 OFFERINGNUCLEAR INNOVATION & TECHNOLOGYR olls-Royce operates a global purchasing organisation with a Supply Chain total spend exceeding billion. Rolls-Royce has 950 purchasing employees globally and employs 18,000 active suppliers, across a large and growing number of products and parts. This supports a diverse business purchasing portfolio embracing technology development components for manufacturing, direct finished for both MRP and project-based is at the centre of external Supply Chain Management in a complex international environment and is responsible for the selection and Management of suppliers whilst meeting our customers strategic requirements in quality, cost and delivery.

2 Rolls-Royce has purchasing employees in over ten countries across Europe, Asia and North America. Training and development is a key part of our business with 80 per cent of our employees trained to a graduate level or above, with many holding the industry accreditation of Chartered Institute of Purchasing and Supply (CIPS).Specifically, within the Nuclear sector, Rolls-Royce has over 50 years experience in establishing, developing, maintaining and managing Supply chains to support nuclear component manufacture, technology development including specialist product design applications for the UK s defence and turnkey infrastructure Chain Management MECHANICAL SYSTEMS AND COMPONENT ENGINEERINGI nvite InterestPre-selection InspectionSelect for RFPD eselect following Tender SubmissionsNegotiate and SelectAccreditAwardMaintain Performance and DeliveryRegisterRolls-Royce Supply Chain processRolls-Royce Power Engineering plc PO Box 2000, Derby DE21 7BD, EnglandTel: +44 (0)1332 632688 Fax: +44 (0)1332 622936 Email.

3 2010 Rolls-Royce plcWhilst this information is given in good faith, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or any of its subsidiary companies. Supply Chain Management Applications:Utilising and building upon existing resources Rolls-Royce manages an external Supply Chain for nuclear components. We have proven capability in: Rolls-Royce Supply Chain Management skills consistently deliver both on-time and high quality products to a diverse Customer base. Customer benefits include affordable unit cost Supply against a background of reduced total acquisition and risk costs, driven by:Tools/Equipment/Software: Rolls-Royce has embedded an executive enterprise resource planning tool and continually invests in modern IT solutions in support of Supply Chain Management functions.

4 We employ web enabled sourcing software through our preferred service provider EXOSTAR including the use for e-auctions and electronic request for quotes/proposal. Examples of tools adopted and implemented by Rolls-Royce include:t 4 USBUFHJD 4 PVSDJOH 5 PPMTFU "3*#" o 4 ZOUIFTJT o BO PO MJOF TZTUFN facilitating the creation of commodity and supplier strategies, contract creation and negotiation (clause libraries), supplier performance Management and Supply Chain spend 3BX .BUFSJBM 1 MBOOJOH 4 VQQMZ $IBJO .BQQJOH */'03 o BO JOUFHSBUFE software package which maps the sub tier Supply Chain providing demand signal visibility, risk and utilisation analysis, demand simulation and key points of failure "O BDDFTTJCMF XFC CBTFE A(MPCBM 4 VQQMJFS 1 PSUBM XIJDI FOBCMFT SBQJE information interactions and provide valuable Supply Chain quality and performance.)

5 In managing a global Supply Chain , Rolls-Royce fully utilises its resources, processes and structures, offering significant benefits to its following table summarises the key benefits Rolls-Royce offers its customers by managing the Supply 0 QUJNJTFE 4 VQQMZ $IBJO %FTJHO 1 MBOOJOH BOE $POUSPMt 4 VQQMJFS &OHBHFNFOU %FWFMPQNFOU BOE .BJOUFOBODFt 4 USBUFHJD 4 PVSDJOHt 4 VQQMZ $IBJO 3 FMBUJPOTIJQTt 1 VSDIBTF &YFDVUJPO BOE -PHJTUJDT .BOBHFNFOUt 2 VBMJUZ .BOBHFNFOUt 5 PUBM $PTU .BOBHFNFOUt 5 PUBM -JGF $ZDMF .BOBHFNFOUt *OWFOUPSZ NBOBHFNFOU TUPSBHF IBOEMJOH USBOTQPSU JOTVSBODF DPTU PG EBNBHFT t 8 PSLJOH DBQJUBM PVUMBZt 0 WFSIFBET CVJMEJOH NBJOUFOBODF SVOOJOH DPTUT USBWFM DPTUT t 2 VBMJ FE BOE USBJOFE 4 VQQMZ $IBJO QSPGFTTJPOBMT o XJUI QSPWFO QSPEVDU BOE JOEVTUSZ TFDUPS LOPXMFEHFt $POUSBDU OFHPUJBUJPOT UJNF BOE DPTUT t -JOFT BOE CSFBEUI PG DPNNVOJDBUJPOt 4 FDVSJUZ PG *OUFMMFDUVBM 1 SPQFSUZ 3 JHIUTt 'PDVTFE TVQQMJFS NBOBHFNFOU BOE SFMBUJPOTIJQ CVJMEJOH TLJMMT GPS DPOTJTUFOU BDIJFWFNFOU PG QSFEJDUBCMF PO UJNF QFSGPSNBODF Reduction of Risk due to Opportunities due to Supply Chain

6 StrategiesProviding access to new Supply chains and capacity without extensive start up costsDeveloped Supply Chain design and programme Management world-class expertiseLeverage of known Supply chains to establish competitive pricesIn Supply Chain logistics Management (MPCBM PCKFDUJWF UP BDIJFWF XPSME DMBTT standard of staff to spend ratio of 48 FTE/$bnActive nuclear Supply Chain Management programmeReduction of interfaces (and communication complexity) by operating single point of contactReduce complexity by operating single point of contactNo duplication of rolesQuality resources embedded within the nuclear Supply chainEmbedded total cost of acquisition models.)

7 Supplier evaluations beyond price Nuclear qualified resources throughout the purchasing life-cycleEstablished elemental hedging deals that enables price viability/stabilityEmbedded risk Management cultureConsolidated volume leading to real leverage opportunitiesDeveloping suppliers through a robust evaluation tool that promotes continuous improvementInnovative design to improve performance whilst reducing to total life-cycle costs7166